U.S. markets faced a volatile session on Tuesday as crypto-related equities slid ahead of a closely watched Senate vote on the CLARITY Act, while the 10-year Treasury yield climbed above 5% for the first time since 2007. Stock futures were lower as rising oil prices and stubborn inflation expectations drove bond yields higher and pressured risk assets.
Coinbase fell 4.1%, Robinhood declined 2.2%, and Strategy dropped 3.5% as optimism faded over the digital asset regulation bill. The CLARITY Act, which would establish a clearer regulatory framework for digital assets, needs 60 votes to advance in a procedural Senate vote Tuesday afternoon. Disagreements remain over stablecoins, banking competition, and rules around political officials holding crypto. A failure to advance would leave regulatory uncertainty in place for exchanges and crypto-linked stocks.
Broader market pressure came from the bond market. The 10-year U.S. Treasury yield rose above 5%, its highest level since 2007, as traders weighed the possibility that the Federal Reserve may raise rates again. Higher yields make government bonds more attractive relative to stocks and can weigh especially on growth and technology shares.
Elsewhere, chip stocks recovered modestly after Monday's AI-driven selloff. Nvidia shares bounced slightly, while Intel, Micron, and Sandisk edged higher. TSMC also reached a new milestone as MediaTek unveiled a 2-nanometer smartphone processor designed for on-device AI. Meanwhile, Elon Musk said at the All-In Summit that he did not rule out a Tesla-SpaceX merger, citing growing operational ties in AI, robotics, batteries, and energy.
In other market action, Dave & Buster's fell 14% after an unexpected second-quarter loss, while Radiant Logistics rose 13% on strong fiscal fourth-quarter results. Enova International dropped 20% after withdrawing its bank acquisition application, and Sysco slipped after pricing a share offering to help fund its Jetro Restaurant Depot acquisition.
